There are many clichés which go around - chief among them is a game of two halves, a year of two halves and the like. Last year, was a year of two clear, distinct halves - the kind which would make a cliché happy.
Till the Bumblebee address by Mario Draghi, the year 2012 was a culmination of, not just the profligacy of the previous decade, but a failed system and a failed bailout. Spain couldn't borrow at a cost which they could afford to repay and the Greeks were perilously close to debt repudiation - an idea I put forth to a European Central Bank executive during my visit in February 2012 and it was never really answered. His answer, which I believe is the German answer, was that you have to pay back what you borrowed - a full 100 cents on the Euro to the E.C.B. if not to anyone else. When you can't control your own monetary policy, it is a tough ask - more on that later.
World equities and in particular European equities were facing a grim battle in H1'12. Companies, unlike countries, cannot spend their way out of trouble - they have accounts to maintain. China was all set for a hard landing - something which would not only put the skids on any hope of a recovery, but lead to a crash in the markets of most of its’ trading partners. China was the driving force behind the commodity boom of the previous decade and it had grown "too big to slow". The Chinese leadership made it clear that steering the world out of an economic slowdown wasn't something they were willing to do - so much for their world leading aspirations. USA, not even a year on from a downgrade by S&P, couldn't come to terms with a new debt ceiling and companies exposed to Government budgets couldn't decide whether the sectors they were exposed to would be sequestered - an automatic spending cut triggered in case of a budget impasse (happened yesterday,9/30/13). India showed itself to be an exemplar at policy inaction. A progressive Prime Minister couldn't rally the cabinet, the allies and the opposition behind some of the reforms he proposed. He wore the look of a defeated man. That an emerging economy can't accept limits of 50% FDI in, operationally and logistically, poorly run sectors like Airlines and Retail is ludicrous. The irony was that India was grappling with inflation - supply side inflation - something a Central Bank cannot control by cutting rates. Cutting rates inflames supply side inflation and ever the hawk, The Reserve Bank of India, could, at best, only hold interest rates.
Enter - Mario Draghi
"Whatever it takes" is not open to interpretation, it reads and speaks like it is written. The minutes of the meeting after which Mr. Draghi said this phrase aren't yet known, but the message was loud and clear - The Euro will live - along with all its constituent members. Period. Italian and Spanish borrowing costs came down heavily. A seemingly "Risk on" year morphed into a "Risk off" second half. Italian stocks rallied as the yields came down, the Spanish thought the best way to capture this rally would be to ban short selling. After all, it was the vulture like hedge funds which hammer down equities and it is those very same hedge funds who spike their borrowing costs and to top it all off - they never ever even own these assets, they either bought insurance against a credit event - a Credit Default Swap, or simply bought "puts" on the equities - situations wherein you profit when the underlying asset goes down in value.
The first task was just to name it, and then I realized why I didn't have to bother. La Poderosa, of course would have a nice, albeit plagiarized, ring to it. And being a non-Spanish speaker, I couldn't come up with a El Nino, El Pipita or El Apache although La Brujita would have been an apt name for all the trouble it would later give me. It came named as Machismo by the manufacturer, so I just ran with it - liberated from the furtive attempts I made in my head to escape any legal action which would follow once I became sufficiently famous.
This was one impulsive ride, to ride from the heart of the Indian Deccan Plateau to the coast city of Chennai. Found a wonderful friend to tag along, oblivious that temperatures in these parts hit 50 degree Celsius at the cool shady tree where the MET department measures them. On road temperatures, on a mechanical bike with separate Gear, Clutch and Engine assembly (No Unit Construction Engine i.e.) temperatures would comfortably be 55 degrees! Bereft of proper riding gear, we just put on jeans, Woodland shoes, "cool" tshirts and rode.
The route, we picked it to have everything. We could have done the boring : origin to nearest city with a connection to the golden quadrilateral (a network of highways in India connecting the four metros, Delhi Bombay Chennai and Calcutta). That would have entailed a 200km ride to the city in question and then a straight drop on the Golden Quad for about 550km on broad roads with no adventure. Sounded BORING. We instead chose a route which had a 6 lane expressway for 200km, single lane state highways for a further 200 and a hill section for another 200 before hitting the coastal plains for the home stretch. It was the best decision of the entire ride.
Going into details seldom does justice. Maybe I'll change my mind later. But they were the same personal feelings everyone has on these rides. A few epiphanies too. It's why most people I know saw Apocalypse Now alone. Later, a nod to another one who did, would suffice. So this is more an introduction to the machine than anything else.
And a few pictures. And I shed deadskin off my arms for three weeks afterwards (never ride in 50 degree plus heat). Never knew humans had reptilian properties.
Like all crises, India's is a unique mess. Starting off with the Central Bank reaction to the '08 slowdown.
The Reserve Bank of India cut rates a bit too steeply when the '08 crisis hit. This led to a lot of hot Indian money flowing around. Embedded deep within the Indian psyche is to stash cash into two assets - gold and land. One non-yielding and the other immovable. Some say those are the properties which make them "hard", I would say those are the properties which make them non-yielding and immovable. Land prices start rising.
Fiscal irresponsibility can never be too far behind in an election year ('09). Enter The Congress Party. The National Employment Rural Guarantee Act (NREGA) goes into effect. Promises the rural unemployed Rs.150 per day. The labourers from the Bihar-Madhya Pradesh-Uttar Pradesh belt who make up the backbone of everything from construction to service labour, prefer to stay back in their villages and simply cash in on the guaranteed payment. Without the influx of this cheap labour, labour costs start rising.
2011, with the Rupee hitting new highs (I ordered my squash gear from the US when the 1USD = 39INR), inflation ticking up and hot capital from QE2, the rates are raised too steeply and too soon. Capital becomes more expensive.
And here we are today, all three factors of production are expensive and our insatiable and unsustainable appetite for neither oil nor gold looks to be abating.
Dortmund's victory over Arsenal last night is widely seen as a smash and grab raid. Maybe, rightly so given the nature of the winner - an 83rd minute counter attack. However not delving deeper into what enabled the winner would be an insult to Dortmund's philosophy.
The first goal, scored by Henrikh Mkhitaryan is probably the best example of "gegenpressing" that you would find in the game. Losing the ball in the final third, but hounding the opposition to win it high up the pitch, and succeeding when Aaron Ramsey took one touch too many and had a cute vision of how it would end. With Dortmund though, it ends in one of two ways - a goal or a corner. Teams which are set up and sent out with THAT intensity, will not let up - more so in the final third (they'll simply say it makes more sense to win the ball closer to the opposition goal than your own!).
A remarkable feature of the game was that Dortmund outran Arsenal by almost 15km (rumours of this intensity causing injuries, over the course of a season, could hold some water, no?). They have taken Gunter Netzer's quote to heart, "Wenn es nicht läuft, liegt es oft daran, dass die Spieler nicht laufen". It can be translated to, "If things aren't really running for the team, it is because the players aren't running (hard enough)". Against this Dortmund team, there will be no easy games, not for Arsenal and not for anyone else.
A 4-2-3-1 formation, mirrored on either side, seldom leaves much space in the middle of the park and it is here that Dortmund's aggressive ball winning was important. It was important to stop the supply to the full-backs who had swathes of green ahead of them. More often that not, it was Full Back v Full Back on the wings, with limited support/feints provided by overlapping runners. Dortmund shut out the supply route to the wings better - the only area on the pitch with some semblance of space.
Which leads nicely to the winner, assisted by Kevin Großkreutz - a makeshift right back on the night. Space - First touch - Lewandowski - Goal (duh!). It was one of the few occasions on the night when a full back had space and space for Großkreutz was a far more regular feature than space for Sagna or Gibbs (the Arsenal full backs), simply because Dortmund were able to recycle the ball to him fast enough.
The other day, I was out with my friends, the four of us were sipping the best possible filter coffee in the South Indian city of Chennai (Madras). The un-Indianness of the city, and the state, never ceased to amaze me and as a staunch nationalist my three friends had to listen to brazen idea after idea of how we could mend it.
As any (North) Indian would testify, making Hindi compulsory is the first solution. Granted that is done and by some miracle a generation later all of Tamil Nadu speaks Hindi, would the nation be any stronger, better off by adding 80 million people to the Hindi-speaking world?
My problem was never the un-Indianness of the southern states or the North Eastern ones, it was the un-Indianness of all of India. What do we, as a nation, believe in? What do we believe is our place in the world? Can we, as a people, pull together and achieve it? But rather more pertinent would be to wonder whether we belong to each other, to the same "nation"? The North to the South and the East to the West. The Hindus to the Muslims and the Buddhists to the Sikhs. The Telugus to the Rajasthani and the Kashmiris to Biharis. Let's leave the more pertinent questions for later, including my statement of the un-Indianness of Chennai. These are deep questions indeed, and hopefully in the course of these posts, I will touch upon them.
By the time the coffee sipping came around, I was pretty deep into my study of ethnicity. My brazen idea that day was to give any child born anywhere in the world, to an Indian parent/s or even a single Indian grandparent an Indian passport - ethnic nationalism. I knew the shortfalls of what I had just uttered. Being Indian is a very hard thing to define. A thousand different languages, the birthplace of four religions and a land inhabited by immigrant upon immigrant were all mitigating factors, let alone the right to self-determinism. Somewhere in the argument I also said India is the land of Hindus, and you can imagine the umbrage of the two Catholics in the group. They said they are just as Indian and they are absolutely right. Generation upon generation has grown up being taught that each of one us, irrespective of caste or religion, is Indian. Nothing Orwellian here folks. All Indians are just as equal.
I will let today's post deal with just one facet of strengthening the national identity - statecraft, India gave it to the world after all. (for the uninitiated, Chanakya pre-dates Machiavelli by more than 1500 years and it is hard to believe Machiavelli didn't read Arthashastra before writing his Arthashastra). That one organ of the nation which remains sacrosanct - untouched by political parties, essentially a propaganda machine. As silly as it sounds, it is the best starting point. To instill pride among a people, we need to be told of our victories, of our greatness; very often. The victories at WTO, where the nation won concessions to well, continue giving concessions to the poor, the Indian aid to build the Afghan Parliament premises, the Indian involvement in Maldives, Sri Lanka and Bangladesh must all be trumpeted. No nation is foolish enough to not act in national interest, but if ever there was one which looks to "just help" and take stock of the situation later, it is India. This must be known to Indians and the world. The treatment of Indian Muslims is perhaps as good as it gets anywhere in the world, including the Islamic world. There are separate Haj terminals at the major airports to facilitate their pilgrimage to Mecca. And we have built them without ever facilitating travel to Amarnath, Kedarnath, Puri or the Kumbh Mela (all Hindu places of pilgrimage/congregations). For the 1 billion plus Hindus, there are no special arrangements to visit any of these places, and yet they are more than happy to accommodate the pilgrimage to Mecca. I don't know of another country which does this. This is not to raise questions about equality, but to re-enforce the truth of our equality. Equality which we give each other, the day we were born, yet we seem to forget it because it is so commonplace. Granted, that is the best form of equality - the unconscious form, but in a nation being put through major sectarian violence at least once every decade, these messages need to be enforced.
The subtitle gives you a fair idea over the need to hedge
The will ebbs and flows, but I try keeping it at its' most
I'd be damned if I knew which one I cherished the most
Maybe the only solution is to dregde and dredge
This blog has one aim. It is to work out in and rate all the gyms around! Being in India, it will obviously be India centric. But I am a traveller too, and hope to have reviews of gyms the world over!
My history with gyms is not as deep as some of the hardcore lifters out there. Most of my work has focused on functional strength and training and I don't remember the last time I did a bicep curl. I have played squash on the national circuit for 8 years and have captained my university squash team. I play football too, most of the time as a central midfielder. So you begin to get an idea of what I look for in a gym! Lots of free weights, lots of space, don't care about the various contraptions, kettlebells and rowing machines!
So here we go!
Indians value "paisa vasool" (value for money) more than any other factor while making a purchase.
So I'll tackle that at the end, if at all I do. This one is about the gym. What you feel when you workout, the kind of people around you and the kind of free advice trainers dish out (this is all part of paisa vasool).
First things first, this is one of the few gyms I have worked out in, which has an entire floor for free wights. The only corruption is a Smith machine, but it at least gets people to squat and bench, so I don't begrudge it. This floor is a terrace converted into a floor with a false ceiling and sliding windows, which lends it a raw edge. No air conditioning, speakers which seldom work and hence free of (another corruption) music. Enough benches and enough space. One of the few gyms in Bangalore with a proper squat rack. So your squat isn't the least common denominator of your overhead press or your partner's snatch!
The free weights section also has a LOT of 45lbs discs. So the strongmen can really get going without having to cobble together 45lbs with 5/10lbs discs. This also helps your DL form, but not making you bend lower than you need to. Dumbbells aren't in short supply either. Almost every weight till 60lbs has two pairs available. The one major drawback though is the lack of kettlebells. Replaceable with dumbbells, but not without a loss in training efficiency. For gymmers looking to do box jumps - disappointment again. Because of the windows around this free weight section there is almost nothing you can use as a box of challenging enough height.
A stretching section as long and as wide as the free weights section that it runs parallel to, also where you can skip and try doing box jumps on the perimeter wall (this one is a bit too high to do on a regular basis, maybe for your "really explosive" days!).
6 new arrivals, 13 shipped out and yet the one player most despised continues to remain at the club. Danny Welbeck's defection to Arsenal is being held out as a sign that Manchester United is the English "galactico" machine and Arsenal is the best place for a British youngster. Mike Phelan, assistant to Sir Alex Ferguson for five years, said a link to United's past has been broken now that Welbeck has left. And Tom Cleverly is still a Manchester United player. Is there no justice in this world?
The range of emotions among United supporters around the world is between confused and happy. Yet no one feels a "link" has been broken. Confused, mainly because United could have strengthened a direct rival (for a top 4 finish) and happy because United got GBP16m for a player who never came close to fulfilling the early promise he showed (some would even dispute that he displayed promise). Mediocrity, in any nationality, shouldn't be tolerated.
The symbol of United's transfer window is not Falcao now wearing the number 9 or Di Maria wearing the famous number 7. It is the number 23 - who refused to go away. Tom Cleverly. The English International midfielder who at various times was supposed to be the great hope for the national team as a no. 10, United's midfield answer and part of a long illustrious line of homegrown talent. He ended up being nothing and in his last outing against Sunderland didn't even look a footballer. Yet, he is symptomatic of most ills that befall the English national team and United's search for homegrown talent. A player who should have buckled down, accepted wages of GBP30k a week and left to play regular football in the Midlands, continues to remain on United's wage book mainly because he didn't fancy leaving the North West. Yes, you read that right. A 25 year old, who is clearly not what United need currently, did not want to leave the North West. And we wonder why England doesn't produce decent footballers.
The overriding reason is that it doesn't produce intelligent human beings. Whereas rugby union throws up examples of how players left the Isles to endure hardship in New Zealand and earn their first Test cap at the age of 26, English football throws up examples of good-for-nothing-athletes earning up to GBP60k a week for warming the bench. And despite years of that, have no professional ambition. A player refusing to move out of the NW must be the most ludicrous reason anyone has ever given (in my books it surpasses the I-didn't-get-birthday-cake-Toure-episode as that came after a 20 goal season where he drove them to the title. Cleverly's tantrum comes after proving to the world that he's not a footballer).
Danny Welbeck is a similar example of overreaching and under-delivering. He demanded starts as the central striker, yet failed United in two of the biggest games in previous seasons with his errant finishing - against Real Madrid and Bayern Munich in successive Champions League campaigns. On being guided by the United coaching staff to aim to shoot low when Neuer charges in a 1v1 scenario, he proceeded to try a cute chip which Neuer swatted away and sent United packing. If a player scores 1 goal a season - even playing "out of position" on the wing, you have proved you are not a natural goalscorer. Being built like one, doesn't mean you can play like one. FYI Ronaldo scored 17 from the wing in the 2006-07 season.
I started out as a fresh faced analyst an a hedge fund in June 2012. A hedge fund start up, mind you, not the Bridgewaters and Green Lights. It was still a $1.2bn fund though. $1.2bn was just enough to make us not nimble enough to enter and exit stocks at lightning speeds and not large enough to petition a board.
As a buy side analyst, your primary job is to assist your fund manager in making the right bets. You might track 50 stocks or 250, you might not be very well used and heck you might not even use your brain very much, but when called upon - you could not stutter. You need to have an answer. One of the European fund managers had this habit of waking up in the middle of the daily call and shooting questions - which go from should we book profits to the companies are selling the same product so why do they trade differently. One of the most most persistent questions was, will this pair converge? We were a market neutral hedge fund after all. You learned to be prepared at times, with EVERYTHING that was moving your stocks.
By virtue of these daily calls with the fund managers, and the sell side analysts constantly speaking with you and trying to sell you ideas, you end up knowing a lot about the industry you track and about the overall economy and markets. And perhaps more importantly, it affords you enough information to speak about these ideas for hours on end. Investment theme at work if RBS and Barclays don't converge, BAM.... Buy global car exposure and sell European car exposure, why? BAM!
So a hedge fund definitely teaches you about the industry you track like no other job can. It teaches you what is important to a fund manager and to think like one, because let's face it - all buy side analysts are wannabe fund managers, so this knowledge is mighty important. You also learn to operate without asking too many questions. I to this day, do not know the exact strategy of the fund or the algorithm we used to trade stocks and how important the human input into it was. And while that wasn't exactly liberating, it did afford some protection when you helped make 7 digit losses on a single trade (as I once did).
After the fund blew up, I moved to an investment bank. Didn't do any mid market bank here, I moved to a behemoth. I moved into investment research. Which meant I was servicing the buy side, where I was working till a few months ago. Far from being a step back, it has turned out to Be a great learning experience.